As reported recently in several major newspapers and on Zero Hedge, the NY Fed is undergoing an audit of the gold stored in the vault of its Wall Street office. Reportedly about 23% of the world’s official gold reserves, including gold owned by foreign countries and the IMF, are stored in the central bank’s vault. One could assume from the Fed’s timing that this might be an effort to put to rest ‘conspiracy theories’ about the Fed’s missing gold. Although those concerned about the Fed’s ‘transactions’ in gold, see this as the Fed’s attempt to quiet concerns while avoiding the real issue.

The fed would be feeling a bit of pressure as its management of the US’s gold has come under some scrutiny lately. Not only because of the ‘audit the fed’ bills recent success  in the house but also because of increased news coverage of GATA’s concerns of gold market manipulations, and the recent ‘Gold Action’ campaign out of Germany, which is supported by some German legislators and calls for the repatriation of the countries gold reserves held at the Fed.

The LA Times is reporting that the audit began in January and is being conducted by employees of the Mint, the Treasury inspector general’s office and the New York Fed and monitored by employees of the Government Accountability Office. Ron Paul’s ‘Audit the Fed’ bill calls for an audit that would also be conducted by the Government Accountability Office. However, Paul’s bill would require a review of policy decisions as well.

While there has been some concern about the actual amount of physical gold in the Fed possession, Representative Paul, GATA and many others, are equally concerned that the gold is been used in secret or ‘un-disclosed’ transactions.

GATA has commented on the audit on their website, noting that the audit is only “confirming the gold content of the bars kept there, and not touching on issues of ownership impairment, like swapping and leasing, the issues raised by GATA and others aggrieved by manipulation of the gold market.”

There are big concerns that the ‘paper claims’ on the physical gold held at the NY Fed’s location are far greater than the actual physical gold present. And while this audit may produce some nice headlines at the end of the year, until the Fed allows an audit of the gold’s paper trail the ‘conspiracy theorists’ will remain far from satisfied.